Apart from the top 3-4 NLUs why do the rest of the NLUs or TLCs have absolutely horrendous faculty ? Why is the quality so bad ? Is it because teaching is the last career option for most of them ? Is it because they teach subjects they're not interested in ? Is it their own backgrounds?

NLUs and TLCs often suffer from poor faculty quality because academia becomes a refuge for those who couldn't hack it elsewhere, resulting in a mishmash of disinterested educators teaching subjects they neither understand nor care about, nor could they be bothered to even care about. Most of them only care about their two-hour lectures, and that’s it. The generally poor student quality of these institutions also means that students don’t care about whether or not their professors do their job properly. Furthermore, mediocre professors frequently use the narrative of "academic freedom" to protest against their firing.

Law has other options as well. So teaching naturally becomes the last choice for 90%. Therefore not a lot of good people.

It is a combination of several factors. Lower salary than industry is not that important. Admin red tapes, hostility from colleagues if you want to do the right and progressive thing, decreasing student quality and apathy, hankering for only attendance and easy grades instead of any desire to learn, excessive teaching and admin workload and no opportunity to conduct meaningful research, all these make most good people stay away. The vacuum gets filled with bad people who don't care about any of those. Even the top NLUs have got plenty of such faculty.

It's the same in India in any field (terrible profs outside the top 1% of colleges). The bright people interested in academia are all teaching or doing research abroad. So many Indians are profs in the US, UK and Australia now